F.C.C. Asks AT&T for Details on Plans to Halt Fiber Expansion

http://bits.blogs.nytimes.com/2014/11/14/f-c-c-asks-att-for-details-on-plans-to-halt-fiber-expansion/?ref=technology

by gordon_freeman • 12 years ago

107 82 12 years ago

bits.blogs.nytimes.com

It's almost as if AT&T was only planning on rolling out fiber if they could sell it at a premium and effectively end around the cable companies in the next 5 years by replacing traditional TV charges with premium on-demand Netflix/Hulu/Whatever else. That would be a smart move for AT&T, but would be bad for the consumer. Just think, instead of spending $10 for Netflix, you could spend $15-20 to have FAST NETFLIX (and probably other bundled junk you don't care about). Even better, they could bundle internet with netflix with phone with dvr for like $150 a month!!!!! Think of the margin on that!!!!!

Seriously though, it's good that the FCC is looking into this, but I doubt they will do much about it. At some point there is just too much money involved for the "right thing" to happen when it comes to your average consumer/citizen.

akersten• 12 years ago

I can't think of a clearer indication that a monopoly needs to be broken up than when they hold the customer hostage after their lobbying doesn't affect legislation to their benefit.

hughw• 12 years ago

Every thirty years, we have to break up AT&T again.

JadoJodo• 12 years ago

The crazy thing is they've re-acquired almost all companies that were broken off. The rest went on to form Verizon.

vertex-four2• 12 years ago

You did it entirely wrong last time - you split it up geographically, but still had the ISPs owning the last mile infrastructure. You only actually have to split it into two companies - one which owns the cables, and the other which runs an ISP.

Then you write a charter which requires the company which owns the cables to sell access to any ISP at the same terms and cost.

Then you implement a law which says that no ISP may own a last mile, and all last mile infrastructure past and future must be under those terms.

That way, you entirely skip the issue of the cable owners having no competition or incentive to expand, and you have competition between ISPs as well, without tying one to the other. ISP implements throttling? You can use another ISP that uses the exact same neutral last mile.

This is more-or-less what the UK does, with the addition of the no-ISP-may-own-a-last-mile law, which I strongly believe we should implement.

jrjr• 12 years ago

AT&T = KiloQuads & Byte Reversals. Same old song. Some day they might realize that faster service leads to empty slots in the mux stream that they can sell.

Call in Google, they get it.

rhino3692• 12 years ago

AT&T can hardly be called a monopoly. Cable broadband has a much larger marketshare. It only has 16 million wire line subscribers.

Edit: Though obviously some areas, AT&T is the only broadband providers. But breaking it up won't solve that issue at all.

nostromo4• 12 years ago

Question: why do we need net neutrality right now? It seems to be pre-emptive legislation. (The ISPs might do something bad, so we need to prevent it.)

I hear a lot of concerns about internet access costs. If that's the true problem, then let's enable more competition. The last thing I want, personally, is an internet provider as innovative as PG&E.

azinman24• 12 years ago

Because they're actively slowing connections to their benefit.

http://www.huffingtonpost.com/2014/06/13/netflix-slow-fcc-ve...

When was the last time an ISP actually truly did something innovative that has stood the test of time outside of offering faster internet speeds? Or multiplexing cable/telephone (aka more delivery of content aka a utility)?

nostromo4• 12 years ago

Let's assuming they did something bad here. Is the best response to give the FCC more control over the internet?

Before answering, consider that the current head of the FCC is a former lobbyist for ISPs including Comcast and TimeWarner.

Or is the best response to increase competition among ISPs? How many people would choose the ISP that throttles Netflix?

rhino3692• 12 years ago

Net Neutrality wouldn't prevent these kind of peering battles. Comcast had the Netflix slow down and it's currently legally required to follow net neutrality.

wmf3• 12 years ago

Intentional congestion went on for over 8 months; it's not a hypothetical problem. http://www.measurementlab.net/static/observatory/M-Lab_Inter...

api• 12 years ago

It's not pre-emptive. "Toll roads" on the Internet are a reality. It's also not a case of unilateral regulation imposed on a free market. ISPs have their monopolies due to regulation, and have in many cases received public funds. It's not and was never a free market to begin with.

hayksaakian• 12 years ago

here's a real life example that's happening right now:

tmobile will cap your 4G data on certain plans.

UNLESS you're using that data to access their approved partners.

that's clearly anti-competitive because a new streaming service now needs to negotiate with tmobile to be competitive on top of actually having a better service.

tzs2• 12 years ago

I don't see that as a net neutrality issue, although some who take a stricter view of net neutrality do. You buy a capped plan from T-Mobile, and you can use up to your cap's worth of data anywhere you want, and they don't selective block or throttle your data. Net neutrality, I think, should be about making sure you get what you pay for, free of interference. If an ISP, or anyone else, wants to give you free or reduced cost services beyond that, fine.

Their Music Freedom service gives you extra, free, data for music streaming separate from your plan for many major music streaming sites (and they have said they intend to expand to all legal music streaming sites). If objection is to be raised to that, I think it should be under antitrust, not under net neutrality.

What it comes down to is a question of whether or not an ISP can use their own network to offer services in addition to the service of "general internet connection". I don't see any good reason to disallow this), as long as these services do not interfere with the general internet connection service (and do not run into antitrust issues).

I think this is clearest in the case of cable ISPs. Most of these are also cable TV providers. Almost no one objects that your bandwidth for watching cable broadcast television does not count against any limits on your cable internet bandwidth, even though at the physical layer it is all coming from the same bandwidth pool. They do not have a separate TV cable and a separate internet cable running into your home.

If the cable company decided to use all of the cable bandwidth to run an IP network, and then run their broadcast TV service over that, would we expect them to suddenly start counting your cable TV service against your internet bandwidth usage? I doubt it. TV would still be a separate service from internet access--they just happen to be delivering both over their IP network now.

I see Music Freedom as being similar. T-Mobile runs a mobile device network. It includes an internet data service, and it includes a cellular phone service, and a text messaging service. Those all use the same physical layer (cellular radio), but I believe they have different network layers (and maybe different data link layers?). They are now also offering a service to access music from many streaming music providers. If they had somehow made this run over the cellular phone service part of their network, or the text messaging part, there would be little objection. Hence, I see no reason to object that they are doing it over the IP part of their network--if they keep it from interfering with the general internet access service, than that's just an implementation detail.

I think eventually the cellular voice network and the text messaging network and whatever else they currently run will go away. Each company will run just an IP network, and their logically separate services (telephone, messaging, internet in the case of mobile, and telephone, broadcast TV, internet in the case of cable/fiber) will run over that.

dragonwriter5• 12 years ago

why do we need net neutrality right now? It seems to be pre-emptive legislation. (The ISPs might do something bad, so we need to prevent it.)

It is not a pre-emptive response to a speculative future threat, but a response to actions that have already occurred. The Open Internet principles underlying the FCC's recent regulatory efforts in that domain were first articulated as principles that would be policy objectives to preserve (but that did not, at that time, need specific direct regulatory enforcement) several years before any direct regulation was attempted. The direct regulation came after several issues in which those principles were violated by ISPs, and in which the FCC had attempted to rein those in based on its ancillary authority rather than specific directed regulation, but failed [1].

The 2010 Open Internet Report and Order -- the first "net neutrality" regulation from the FCC -- was a response to both the violations of the Open Internet principles already occurring and the court decisions preventing the FCC from administratively enforcing those without specific regulation.

[1] Most notably, in Comcast v. FCC, 600 F.3d 642 (2010), see, e.g., http://en.wikipedia.org/wiki/Comcast_Corp._v._FCC

sbov• 12 years ago

The last thing I want is an innovative ISP.

nostromo4• 12 years ago

So you're still happy with your 56k baud modem?

pvnick• 12 years ago

I agree, and indeed the Title II designation currently being pushed is particularly harmful for reasons among those outlined here: http://online.wsj.com/articles/obama-vs-the-internet-1415667... (paywall, search the address on google and click the first result).

Unfortunately it seems the majority of tech-savvy folks and technology freedom organizations like the EFF draw a different conclusion.

navyrain• 12 years ago

It should be obvious that AT&T's "concerns" are simply a thinly-veiled threat to withhold high-speed access from the citizenry unless they get guarantees that they can manipulate said access with impunity.

The thing is that AT&T and others won't just pack up their broadband monopolies and go home; they'll respond to whatever market conditions the regulatory regime shapes. They can complain all they like, but the citizenry overwhelmingly wants more integrity guarantees for their internet connections.

This sort of threat is akin to a tantrum from a spoiled child.

pessimizer6• 12 years ago

AT&T's "concerns" are simply a thinly-veiled threat

I don't even think they are a threat. They're a rhetorical point that their lobbyists and bought and paid for supporters in government are going to drum endlessly leading into the 2016 elections.

-----

Do you remember how Obamacare said you could keep your policy, but it turned out that there were many horrible policies that wouldn't turn a profit if there were better policies with lower prices available from exchanges, so the insurance companies stopped offering them? Obama 'lied'. Just wait for Obamanet, where Obama told everyone that net neutrality would guarantee equal access for everybody, but AT&T couldn't afford to roll out to your town because of the burden of his new regulations. Regulations that didn't exist during the Internet's rise, and if they had existed would have strangled it in it's crib.

It is simply unprofitable to operate under regulations that micromanage every aspect, every packet that is delivered to every home. The rollout of gigabit internet to 2M homes over the past two years (to wealthy/gentrified portions of a few, big, prosperous cities) shows you how wonderful your internet could have been if AT&T could have figured out to make their original plan to roll that same speed out to 100 cities profitable under Obamanet. They couldn't; nobody could - the only reason they rolled out to the 2M households was as an extortion payment because Obama threatened to hold up their acquisition of DirecTV if they wouldn't do what he wanted.

Obama wants to treat every piece of the internet equal[sic] - hardcore child pornography and stolen music should download exactly as fast as your netflix that you paid for downloads to your TV, or your electronic medical records (that keep your family safe) download to your family doctor. That seems like something that should be managed by the technicians and job creators that actually built the networks, and have run the networks since the beginning - maybe they know a little more about your internet than some jerks in Washington that are worried that their fancy wine and cheese magazine website won't download fast enough because no real people want to read it. They don't like what we like, so their socialist instincts kick in, and they get scared that what they like can't survive in the market without cheating (Solyndra!!! Solyndra!!! They're trying to kill us!!!), so they regulate that their things must always have as much of the internet as everybody else's things do, even if nobody has ever visited those websites in so long that when you go there, you get spiderwebs on your keyboard (chortle!)

It's socialism for their internet, but not for yours. When you hear them talking about this 'net neutrality' being 'fair' for everyone, look at all of those people in Brooklyn with their super-fast internet while your netflix is freezing so long that you can make a sandwich before it comes back and ask yourself - is this fair???.

-----

If AT&T weren't confident it had the political support, it would do whatever it was told. It would still be absurdly profitable. Profit levels might even end up being written into the law. AT&T knows that they have all of the Republicans (even the libertarians), they have the head of the FCC, and they have plenty of individual Democrats.

I think it's a good thing because the industry is going to pull out all stops and show all of their cards in order to kill this. We'll know who to target politically and who to support. I have little doubt that they will win, though, and this push will be entirely killed for some legislative procedural reason or in the courts on a technicality. Obama is terrible, always loses because he doesn't actually care, and the only reason he's pushing this is political pandering to people like me.

/rant

xaa4• 12 years ago

First, there's quite a difference between unprofitable and less profitable.

Secondly, the internet is a utility. Utilities are regulated because they are essential and because they spawn natural monopolies. Interestingly, the prices I pay AND the service I get for utilities that are recognized as such and regulated (electricity, water, natural gas) are great. Completely the opposite for my cell service and internet. YMMV.

The only way capitalism works is if you have competition. The investment costs are too high, the players have implicit noncompete agreements, and when competition threatens to happen in this area, one player just buys out the other.

azinman24• 12 years ago

Seems to me that they're trying to strong arm the government to get what they and all the major ISPs (especially those with media services to offer) into more ways to double dip revenue streams.

It's kind of an odd double edged play, in that trying to purposefully prevent faster internet nationally (to get the gov't to change its tactics) also makes AT&T less competitive at a time that they offer only DSL to most of the country. Guess that since wired data is only 30% [1] of they revenue they make enough money on mobile+voice that they have this potential revenue stream to dwindle in their arrogance? Or are they just knowing that G.Fast [2] and other ways of extending copper will come so they're playing a fiber card more willingly?

Unfortunately enough money is being exchanged between all the major players & politicians that no matter what we won't end up with a clean net neutrality. This is just a public display of that -- it would be infuriating to know the conversations we don't hear about. I'd love to hear someone finally understand that this is making the US less competitive and get it as a proxied issue in the 2016 race.

[1] http://www.att.com/Investor/ATT_Annual/2013/downloads/att_ar...

[2] http://www.cnet.com/news/lowly-dsl-broadband-poised-for-giga...

ep103• 12 years ago

It would only windle if people could leave their service

wtracy2• 12 years ago

also makes AT&T less competitive

I'd bet dollars to donuts that the proposed cancellations only affect areas where no competition exists to begin with.

xaa4• 12 years ago

No, they are seriously expanding fiber. Almost all of their new hires are trained on and working on building out fiber, and minimal resources are devoted to repairing copper. It would be a complete reversal of their strategy to stop expanding fiber (Source: my dad works there).

In that light I think this is just a rhetorical gambit, and the FCC should call the bluff.

maxlybbert2• 12 years ago

Reasoning by analogy ( http://www.stroustrup.com/bs_faq.html#really-say-that , "proof by analogy is fraud"), I can't help but compare this to toll roads and roads that are free to drive on. I don't know anyone who likes toll roads or toll bridges, and I grew up in an area where they weren't common: I was a married adult before I actually saw a real toll booth. If the choice is between "toll road" and "non-toll road," then voters always choose a non-toll road. So toll roads are only ever built when the alternative is "no road."

Clearly AT&T and others have the ability to abuse their power over the infrastructure in ways that aren't possible in the world of toll roads. But, fundamentally, why would AT&T upgrade the infrastructure if they can't guarantee they'll get a profit from the improvements? In other words, is the debate really between "net neutrality, with little or no infrastructure improvements" versus "no net neutrality, but the infrastructure gets upgraded regularly?"

For the record: AT&T's current move is a simple strong arm tactic: they were willing to install fiber last month when they had no guarantee of an ability to collect a "toll" over it, the world hasn't changed so much that the project won't turn a profit. But I still think it's a useful question to ask: how do the companies providing infrastructure get paid, and why would they bother upgrading that infrastructure?

fernly• 12 years ago

Would it not be the case that if ATT ran fiber to my home, they would charge me a fee to connect to it? (And possibly an installation fee to plug it in, and a rental fee for a modem to connect to it, but set those aside.) The point is that each terminus of a fiber is a cash generator, just as each landline telephone connected to ATT's voice network is a cash generator. They would invest in "infrastructure" in order to ensure a long-term flow of small cash payments -- exactly as they did for telephones in the 1920s, just as electrical and gas utilities did in the 1890s.

maxlybbert2• 12 years ago

They have some costs running and maintaining the system. Connection fees aren't enough, of course people pay monthy subscription fees.

Again, I realize there are obvious ways to abuse its control of its network. I'm a big fan of net neutrality, I just want to know that we've considered what the world will look like down the road. And, really, I can see valid reasons to treat different traffic differently. If Netflix wants to send 2GB of data to a person, there is a deadline of how quickly that data should arrive for a good viewing experience. If somebody wants to deliver 2GB of data to an email server, they're probably OK if it takes a while. Then again, under the current system, there's no way to say what kind of latency or throughput data needs. The best AT&T can do is guess based on who the endpoints are.

grecy2• 12 years ago

Exactly this happened to the monopoly ISP/telco up here in the Yukon, Canada.

When the CRTC announced they were slashing the prices of the telco's proposed "bulk data pipe" products by more than 70%, the telco responded by saying they were no longer going to keep expanding their fiber network to more communities, because "it wouldn't be profitable to do so given this harsh pricing scheme".

There was huge outcry, and everyone pointed out this is exactly the reason a monopoly is bad, because they can hold everyone hostage, etc. etc.

The final result? The CRTC caved, and let the ISP/Telco charge whatever they wanted for the "bulk data pipe" products.

xeroxmalf• 12 years ago

Not quite the same, given Yukon has a population density (2011) 0.07 /km2 (0.18 /sq mi), which is actually fairly hard to make a profit on.

grecy2• 12 years ago

It's not hard at all when the CRTC subsidies said Telco/ISP for tens of millions of dollars annually. The internet products are some of the most expensive in the entire world.[1]

[1]http://www.iphoneincanada.ca/carriers/the-most-expensive-ban...

adventured• 12 years ago

I haven't figured out why the government doesn't focus on spurring a large increase in competition, rather than trying to shoehorn existing monoliths into a regulatory package that nobody can seem to agree upon. Net neutrality or not, I'd like to see a lot more competition in the market, such that your average consumer has, say, three high quality fixed broadband options.

We're only going to get to universal 1gbps consumer broadband speeds in the next decade with a lot more competition.

Nothing about net neutrality will encourage the sloth telecom companies to boost speeds faster.

Google demonstrated very eloquently that with a slight prod, companies including Comcast will dramatically boost internet speed.

dragonwriter5• 12 years ago

I haven't figured out why the government doesn't focus on spurring a large increase in competition, rather than trying to shoehorn existing monoliths into a regulatory package that nobody can seem to agree upon.

Spurring a large increase in competition would involve shoehorning the existing monoliths into a regulatory package that would be even harder to agree on that some form of net neutrality -- and would probably include some form of net neutrality to prevent the newly-spurred ISP competitors from having an incentive to consolidate in order to extract rents from a non-neutral internet.

FlyingLawnmower3• 12 years ago

I don't really understand what people are getting upset about. Isn't this just a business decision on their part not to invest $XXmillions on deploying out fiber when there's uncertainty about what regulations they will be subjected to?

The big debate around net neutrality is that Comcast throttled Netflix users, but I can't help but think that there's a real cost associated with the massive amounts of bandwidth that hi-def video streaming consumes. If AT&T has no scope to offset that cost to either Netflix or the customer, then doesn't it make perfect sense for them to not deploy this until they know all the details?

Granted, I have absolutely no knowledge about any of this stuff...I'm hoping someone on HN can educate me about why this isn't just a logical business decision, and why I should be upset about this as a whole.

revelation• 12 years ago

Right, that massive 4MBit of bandwidth that passes for Netflix HD. I think thats about the state of art in 1970.

Not to mention that the Netflix congestion isn't happening in the last mile, it's at interconnection points that could be trivially upgraded for very, very little money (compared to expanding fiber). Unless they are trying to hide that they have been massively overselling bandwidth to customers, in which case a class lawsuit would probably be in order.

FlyingLawnmower3• 12 years ago

Gotcha. I guess I've had some misconceptions after viewing charts like this: http://cdn.bgr.com/2013/11/sandvine-2h-2013.png that show huge amounts of (relative) netflix consumption.

guelo• 12 years ago

Net neutrality is not about Netflix vs Comcast. It's about preserving the internet as a free speech venue.

tzs2• 12 years ago

AT&T has said they had plans for fiber expansion in 100 cities, and they have had to halt those plans because of uncertainty over net neutrality regulation. Many suspect that this is simply not true--they never actually had plans in the first place. Hence, the FCC would like to know what plans they have actually halted.

FlyingLawnmower3• 12 years ago

Ooh, I see. I'm still confused about the net neutrality debacle, but this sheds some light on this issue specifically. Thank you!

hga• 12 years ago

"AT&T has said they had plans for fiber expansion in 100 cities"

At DRLRports.com, this is referred to as "Fiber to the Press Release".

AT&T all but stopped their fiber rollout after the Great Recession started (along with Verizon), all current action is just to try to avoid too much embarrassment from Google Fiber and the like. And of course sooner or later the Net Neutrality dance would give them a convenient excuse to not even pretend to do it.

ianstallings• 12 years ago

Well the main reason the FCC is getting ruffled is because ATT is a licensee and they only operate because the FCC enables it. Without the pull of the US government no company would be able to install cables all across the country. It would be similar to the railroads telling the US government to shove off. They are already bordering on being a utility. It's only a hop, skip, and jump to nationalization if they don't do the government's will.

dragonwriter5• 12 years ago

The big debate around net neutrality is that Comcast throttled Netflix users

That's not so much the big debate as the most recent highly-visible example. When net neutrality first became a point of debate, Netflix didn't even have a streaming service.

vmarsy• 12 years ago

So AT&T threatens by halting their fiber expansion [1] but at the same time they try to beat Google in some fiber race [2]. Isn't Google actually 'enjoying' this news?

[1] http://www.reuters.com/article/2014/11/12/us-at-t-regulation...

[2] http://www.cnet.com/news/at-t-attempts-to-out-google-google-...

georgemcbay• 12 years ago

Not sure if I'd say they are "enjoying" it.

I don't think Google really wants to be in the ISP business, I think they just felt that moving into it would be the best way to stimulate the existing ISPs to raise bandwidth and lower prices (on the premise that as an Internet ad company, the more Internet people consume the better Google does).

Which has worked, but only hyper-locally (eg. Comcast, Time Warner and AT&T customers in areas served by Google Fiber get much better deals from those carriers pre-Google Fiber, but the rest of us get just as fucked as always).

golemotron• 12 years ago

AT&T really doesn't understand yet that they are a utility.

wmf3• 12 years ago

AT&T was a utility for decades. I'm not surprised that they don't want to go back.

brownbat• 12 years ago

If the current "complaint" from ISPs is that a few single sources are hogging all the bandwidth (and their response is to both throttle those services and offer upload speed match promotions[1]), why isn't there a Netflix / YouTube torrent app, where we end users all pass around encrypted traffic to each other that's hard to signature?[2]

Nails that stick up get hammered down. If our favorite services are getting pounded, why don't we all just work together to offer cryptographically obscured asylum?

[1] http://blogs.wsj.com/cmo/2014/08/25/verizon-fios-speed-match...

[2] Acknowledging that "hard to signature" means there's a cat and mouse game in store. It'd be worth it.

exabrial• 12 years ago

You know, at first, I really was like "yee yee" when I heard the news about reclassification of broadband as a regulated common carrier. YAH, we're really stickin it to the man in the suit at Comcast and TWC!

It got me thinking... this is like, the nuclear option. Innovation around telephony stagnated. Since everyone and everything was the exact same, there was no need for innovation and competition was pretty much illegal. I'm not so sure I want the same for broadband. I'm starting to think it's not such a good idea.

Ideally, we need some middle ground. TWC shouldn't be able to slow youtube down because it competes with their cable business. Actually no one should be able discriminate based on content, period. We should maybe think about classifying ISPs and Transit providers as official legal terms, and the types of contracts you're allowed to enter depend on what type of business you are.

Anyway, flame away, I know this won't be a popular opinion. But that's my thoughts on the subject currently

F.C.C. Asks AT&T for Details on Plans to Halt Fiber Expansion

Related Stories